Quick: think real estate. If the first concepts that come to mind are fee-simple house and strata townhouse or condominium, you’re not alone. These are, without question, the Big Three of property ownership. But if you’re willing to think outside the box, there are a surprising number of other options — although be warned, some might have you shaking your head.
Fee Simple Rowhomes
A long-time standard in Europe, fee simple rowhomes only recently made an appearance on the West Coast. This gentle form of densification uses less land and less construction material — shared walls are one example where significant savings can be realized — meaning lower prices.
Citing the Stoneleigh rowhomes at Silver Ridge, Rob Grimm, principal at Portrait Homes, estimates savings could be as much as 20 per cent over an almost identical, single-family house in the same development. “Plus, since you’re not paying strata fees, you’ll qualified for a higher mortgage.”
Considerations: Title includes agreements that stipulate how costs for future maintenance costs will be divided and may put restrictions on changes to exterior finishings.
Cohousing
Often confused with co-ops, cohousing is actually a conventional strata property that promotes an unconventional, highly communal lifestyle. Most projects are 20 to 30 units and always list a large community kitchen among their shared facilities. Vancouver’s first project is under construction in East Vancouver, although there are more across the Lower Mainland.
Although at first glance it’s tempting to compare cohousing to masterplanned neighbourhoods offering lavish, if frequently underused, resort amenities, co-housing's main focus is on practical, everyday ways in which like-minded people can benefit financially and socially from village-style living — including regular communal meals that engage all generations.
Bottom line: Prices and strata fees are comparable to similar townhouses. However, since owners know and trust each other — often even informally sharing cars, recreational equipment and child minding — day-to-day maintenance expenses can be lower. Easy to sell, many communities have waiting lists and the units never appear on MLS®.
Co-Op Housing
Co-op housing was strata’s precursor and, at one time, was the only way to own a home in a multi-family property. Details vary dramatically, but here’s the basic premise. Purchasers own shares in the company that owns the co-op. Share cost is usually equivalent to the value of the unit but as a buyer, you do not have clear title to that unit.
Pitfalls: Financing is difficult — 30-60 percent down payment is typical. Restrictions may include splitting any profit with the co-op corporation when you sell and inability to pass on your unit through inheritance.
Benefits: Usually below market purchase prices. Monthly maintenance costs can be related to income, good news for lower income families.
Fettered Ownership
A term coined by long-time housing advocate, Michael Geller, this affordable alternative made its debut at SFU’s Verdant townhouse community.
Concept: Reduce land costs (through negotiating a lower land lease rate), construction costs and financing expenses, parking and marketing costs.
The twist: Buyers purchased their home at 20 per cent below market value, but must provide the same 20 per cent reduction (based on the current valuation) when they resell — a restriction that continues in perpetuity.
The benefit: Buyers enjoy a larger home than they could otherwise afford and still benefit from market gains.
Laneway and Coach Homes
Now garnering big time attention, this compact housing form has a diverse range of benefits depending on the format. Often used as nanny/in-law suites or mortgage helpers, laneway homes were originally built above the detached garage of a single-family house and title stayed with the main house. But as demand increased, regulations changed and today, increasing numbers of laneway/coach homes are being purpose-designed and may even that have their own deed registered at land titles.
More on laneway homes here and here.
Shared Resort Ownership
This is perhaps one of the trickiest types of property purchase and definitely not for everyone.
The basic concept: Much like a co-op, buyers purchase a share of the business entity that owns the land. Resorts are typically 30 to 300 acres in size, have an onsite manager/caretaker, and come with a lengthy list of restrictions. Most, but not all, are used primarily as vacation properties, often staying in the same family for many generations.
According to long-time real estate appraiser Warren Allan, Allan Appraisals & Associates, every agreement is unique in structure. Sometimes the boundaries of your specific “lot” are clearly defined but other times not, almost always other member-owners have a 90-day right of first refusal should you decide to sell, and potential buyers typically require approval from directors/shareholders who can veto a sale based on considerations that may include non-conformity with the community lifestyle values.
Even as a professional appraiser, Allan notes it’s virtually impossible to get copies of the ownership agreement unless you’re ready to sign and have the full purchase price in cash — and conventional financial institutions won’t touch these.
Fractional Ownership
Fractional ownership is another option that is commonly used for recreational real estate. For detailed information on fractional ownership, check out this article.
